An indictment charges 49-year-old Glendon Scott Crawford and 54-year-old Eric J Feight with conspiracy to provide support to terrorists with the weapon.
Investigators have said Crawford approached Jewish organisations in 2012 looking for funding and people to help him with technology that could be used to surreptitiously deliver damaging and even lethal doses of radiation against those he considered enemies of Israel. He and Feight assembled the mobile device, which was to be controlled remotely, but it was inoperable and nobody was hurt, authorities said.
"Crawford has specifically identified Muslims and several other individuals/groups as targets," investigator Geoffrey Kent said in a court affidavit. According to the indictment Crawford also travelled to North Carolina in October to solicit money for the weapon from a ranking member of the Ku Klux Klan, who informed the FBI. Crawford claimed to be a member.
The men appeared separately on Wednesday in federal court and were ordered detained until detention hearings Thursday. They could face up to 15 years in prison.
The damaging effects of the radiation would have appeared only days later, authorities said. The investigation by the FBI in Albany and police agencies began in April 2012 after authorities received information that Crawford had approached the Jewish organisations.
Crawford, an industrial mechanic for General Electric, met Feight, an outside GE contractor with mechanical and engineering skills, through work, authorities said. Feight designed, built and tested the remote control, which they planned to use to operate an industrial X-ray system mounted on a truck.
According to the indictment, the investigators had a confidential undercover source in place within weeks after learning of Crawford's attempts to solicit money and later an undercover investigator introduced by the source. They recorded meetings and conversations, and in December investigators got court authorisation to tap Crawford's phones, the indictment said.
In June 2012 the undercover investigator brought Crawford X-ray tubes to examine for possible use in the weapon, followed by their technical specifications a month later. At a November meeting with undercover investigators, Crawford brought Feight. Both said they were committed to building the device and named the group "the guild", the indictment said.
Investigators gave Feight $1,000 to build the control device and showed the men pictures of industrial X-ray machines they said they could obtain.
They planned to provide him access to an actual X-ray system to assembly with the remote control. According to court documents, the sealed indictment was filed the same day and both men were arrested.
A GE spokesman, Shaun Wiggins, said the company was informed on Tuesday of Crawford's arrest and he was suspended from his job. The company had no information that any employees' safety was compromised or that alleged illegal acts were committed at his workplace.